NO B.S. FRIDAY: Who’s going to buy all this stuff?

Our bottom-line economic system seems designed to marginalise people out of the economy. At some point, we’re going to have to find a way to inject people back into the mix.

Back in the 70s and 80s Japan gave the world robots.

Conceptually it goes back further than that. Astroboy first appeared in the 50s. But practical, economic robots emerged much later.

Soon, assembly line robots, particularly in automotive manufacturing, became the norm. If you didn’t have an army of robots, you just could compete. Soon, the whole industry was revolutionised.

And the robots were great for the bottom line. You didn’t have to pay them. You didn’t have to give them breaks or organise daily calisthenics sessions. You could work them around the clock if you wanted to.

Profitability soared.

It was the dawn of the robotics age.

And for the first time humanity had a vision of a future where robots did everything. There’d be a dishwasher, microwave and a George Jetson robotic maid in every home.

Manual labour would soon be a thing of the past. Not just in factories, but in road works, transport, farming, you name it.

Apart from cafes, is there a single industry that hasn’t felt the helping hand of the robotic age?

And some level it sounds like some sort of golden age for humanity. A life free of labour and changing your own pants.

But many people were worried. They saw that unless we radically overhauled our economic system, the robotics age would plunge us into a death spiral.

Say a robot replaces 10 people on a factory floor. That’s great for that firm, but from an economic perspective. 10 people are now unemployed. 10 wages have disappeared out of the system. 10 people and their families are now consuming a lot less.

And a world without work is also a world where nobody’s getting paid.

And so you’d have super efficient production emerging at the same time as you hollow out the consumption base.

“Who’s going to pay for all this stuff?”

And it becomes a vicious circle. The more wages are reduced, the less firms can charge, the more efficient they have to become. The more efficient they have to become, the more they replace their workers with robots, and round and round it goes.

No body wins. The firms, the workers, the robots. We all end up in the unemployment line.

Of course, this isn’t how it all played out… at least yet.

The robotics ages gave way to the digital revolution and a brave new world of electronic commerce opened up.

But the internet in its way probably destroyed as many opportunities as it created. (We’ve still got the same amount of unemployment right? If not more…)

And in Australia we talk about the death of retail. Online shopping just goes from strength to strength.

And I mean I love it. I’m as bad as anyone. I wanted to buy some fridge magnets for a friends kid for their birthday. I found a 12pc set, made in China, for $1.

Delivered.

How is that even possible?

And so we’re looking at the ‘death of retail’. But think about that for a sec. We’re talking about the death of getting together to buy and sell stuff. That’s huge.

And the hollowing out of manufacturing in the developed world goes on at phenomenal pace. This is the fading sunset of Australian automotive right now.

Personally, I think we’ll be fine, somehow. We’ll find jobs for people. There’s never a shortage of things to do.

And the human to-do list is only limited by the human ability to imagine and come up with new and interesting ways to spend our time.

And that capacity is infinite.

But not everyone’s tech optimist like me.

And right now, here is Greece, you can feel the pessimism lurking the streets. Here, they’ve had decades of miraculous technological advance, the dissolving of centruies old political and national differences, and an integration into the Star-Trek vision of intergalactic cooperation that the Euro Area is.

And where did it get them?

Now Greece is broke. Now they’re going cap in hand to the very people they think are probably, at least partly, responsible for the mess in the first place.

And the Greek people are being told that they need to make money. They need to fire up the economy, and earn enough to pay off their debts.

But how exactly?

You can’t compete with Asia on manufacturing. You can’t compete with the Swiss on banking multi-nationals. You can’t compete with Australia on dirt.

Greece has built a name for itself in international shipping. But now the ports are being sold off and privatised – and gobbled up by foreign interests.

Ask young people what they’re going to do, and they’ve got no idea. What does the world need? What does the world want?

What can we do better than robots?

Greece is feeling this pain acutely right now, but I don’t think Australia’s immune to it.

We’re good at digging stuff up and selling it over seas… but what else do we do??

Of course we do lots of stuff, but no one really knows what.
What’s missing here, and more so in Greece, is a vision for what an economy does. It’s a narrative that has space for people.

It’s about a vision for an economic system that is more than a winner takes all race to the bottom.

This is Greece’s challenge for the moment. And I welcome it. When Greece finds its way through, it will be stronger for it.

But this is everyone’s challenge. We’ve ended up with a system that values robots over people; production and profit over meeting people’s needs.

At some point we’re going to have to take stock and figure out how to make it work better for everybody. And Australia will have its time too, sooner or later.

Greece was the birthplace of democracy. Perhaps it will end up being the birthplace of a more human economics as well.

Do you feel confident about our robot-driven future? What gives you hope?

Comments

Yes robots are the next step in our transcendence and we need to welcome and embrace this. It is part of our evolution to higher levels and letting go of our fixation on money, power and politics. We are returning to the Garden of Eden and robots will take us there. Why do we have to work? We are clever enough to overcome our limiting thoughts about the way we structure our lives. Robots can grow food, build houses and clean. So this will free our time for living a healthy lifestyle and relaxation.

Since the start of the Industrial Revolution there have been those that have rejected technological advancement. In 1779 a group of weavers destroyed the new weaving machines for fear that their jobs would be lost, from where we get the name Luddittes. And jobs were lost. But for every job that is lost new ones are created. Most of the jobs that our children will go into have not even been created yet. Even 15 years ago, who would have thought about becoming an App Developer, when such a thing didn’t exist? Looking at the problem is short-sighted. I’d rather look at the opportunities.

the good mining jobs were in setup, now most mines are in maintenance phase, mine companies prefer to pretend they have no local job applicants, so they can hire cheaper overseas workers, who do overtime for free instead of time and a half

John,
You are correct in that work /production is the basis of morale. Humans feel great when they are doing productive things for a cause they believe in. In fact, people will still feel good when doing a good job even on something they may not totally believe in.
Universal “idle” time will not be the sea of Tranquillity people may think is could be. You just have to look at a large group of bored children. How harmonious and productive does that usually end? 🙁

As investors it is our responsibility to invest with a broader picture and to create benefits beyond just our own pockets. Can we create benefit for the country, state and workers through a wiser allocation of our capital towards investment that create jobs and future economic benefit? Oh course we can and we should!
Even if it takes more time and effort than the easy way round. You can be assured you will enjoy the rewards even more because of it.
Happy Ethical Investing.

We could all start by having a decent holiday in our own backyard and helping out those who are really struggling particularly those out off the coast.
SJ and I have just spent a week out in Longreach and surrounds travelling out and back on the Spirit of the Outback, absolutely FANTASTIC! I could turn around and do it all again next week, we had a Grouse time, terrific people, fantastic food, lot’s to do, plenty of smiles and yet they are doing it really tough and so is the country out there.
We need to get off our backsides and get out there and spend some money and if you are lucky, show them some city slicker love.
Cheers!
FJ

Economists tell us we should only do what we have a comparative advantage at and import everything else. If Australia did that the only thing we would do is mining and agriculture and for now provide education services (we are now pricing ourselves out of that and undermining that industry by lowering standards). Mining and agriculture are cyclical businesses and Australia can’t rely on those businesses to pay all our bills. The economists have it wrong.

The trouble is if we give up on an industry, like car manufacturing, submarine building or ship building we will loose all the skills that go with that industry and we have to import those things and go backwards economically. We can have an economic car manufacturing industry. Our wages are less or similar to countries like Germany, France, UK and US that all have competitive car manufacturing industries and our access to technology and capital is as good as those countries.

It seems like this government is deliberately trashing our economy. They are ok to pay out billions in unneeded social welfare to double dipping working mothers but the government isn’t ok to pay out $500m in tax relief to keep our car manufacturing industry going. Every car manufacturing country provides government support to car manufacturers so our government needs to be prepared to do the same.

Government economists say taxpayers should not support car manufacturing while at the same time those very economists are 100% supported by the government. Taxpayers should be getting rid of non productive bureaucrats and put the money into supporting our real wealth creating industries. If this is not done we will borrow money to pay our social welfare bills and our economy will go the same way as Greeces.

The problem is the distortion in value between the work of those who produce the things that society wants and needs, and the top end of town, like in Hockey’s defamation case, 1 million for lawyers on both sides.

They get food and goods at worlds lowest prices, but we can’t employ 3rd world lawyers via laptop, because the system protects their rort.
Is a week’s work by a lawyer worth a lifetime of picking food in the hot sun? or the labour of a whole village in China for a year?
25% of americans worked in manufacturing in the 70’s, now just 5% do, you can’t pay first world bills with 3rd world pay packets

in WW2, England had to deal with economic problems with bombs raining down, and the male labour overseas, we need to get back to first principles, of engaging people in creating the things that people need.

yes indeed,,,if greece goes ahead with their planned exit, so will portugal, spain and italy..nice… these countries were ‘set up’ to join the euro zone. they had no qualification for joining :their economies were in a mess and in debt (1999)…but ..by clever accounting by banks like goldman sachs they appeared to be actually good bets. now the chooks have come home to roost, these massive bank debts become ..wait for it…public debts to be paid for by higher taxation and the banks get their money back via the public as usual. not so nice for greeks etc. i don’t know really what happens when countries default on loans..but it will cause lots of trouble i am sure. the big banks…run by super gangsters the world over..conveniently reward themselves for their misdeeds with massive bonuses…in other words things like g.f.c. were created by big banks like goldman sachs and paid for through taxation of the public…..hmm..not so nice. the derivative debt in 2008 was US $598 trillion…now it is over US $800 trillion. how much is that? ha ha..try counting it. it just reveals how stupid and ridiculous this world of humans has become. ..do we need robots? good question..maybe we could get a few gorillas in to sort it all out. they couldn’t do any worse i hope. i guess thats why i watch footy a lot…a bit of reality. up there cazaly!

If you want answers to how to live in a world of robots then only real answers I would actually agree to is the zeitgeist movement (google it and check out the documenteries).

Its a very bold vision of a new world where humans don’t work for a living since robots can do most of the work. They work on their ‘interests’ which progresses society. It’s a hard concept to grasp initially cause its so different but once you read enough you understand that it tends to have some truth.

You dont pay your water bills as robots would be able to provide and re-use resources so efficiently that we would effectively have unlimited resources. There is no ‘I need to pay for this’ as there is a concept of a sharing economy.

Specifically ‘our final invention ‘ by james Barrat. We don’t know whether the super intelligent robots will keep us around .

How will we transition to this new economy because today if you don’t work life is difficult and far from this fairytale? Today if we don’t pay for water it gets turned off so how will this gap be bridged?

Super intelligent robots are relevant because they create the efficiency you talk about.

I guess my point is we should not hand power to the robots but we already are to some degree with smart phones.

How will we work in an economy which is largely robotic? All I can suggest is another book which is scifi where humans are forced to the edge of the solar system by transhuman entities. Accelerando by Charles Stross. There’s no working on ‘interests ‘ there’s no playing computer games instead of working.

The world is always in balance. Apparently in physics it’s said that matter can neither be created or destroyed. The same holds true for everything. Jobs are lost through technological improvements, but they are also created in other industries, to balance out the other side.
It’s called creative destruction, and if it didn’t happen, we would all still be getting around by horse and cart. How many jobs did the invention of the motor vehicle destroy? People like blacksmiths, creators of carts and carriages, saddlery and tack etc. But would we want to return back to that way of getting around? No aircrafts to get us overseas quickly?
What warps this process is the vested interests and existing industries that have powerful lobby groups that can stunt innovation and stop new technologies and advances in ways of doing things.
Look at the opposition to Uber. The market wants it, but the existing cartels and governments who make revenue from these cartels, want to stifle this innovation. Just one example.
Elon Musk from Tesla has come up with a solar powered battery that can power a whole home. However power companies will do their best to stop this technology from being widely implemented. Almost free and limitless power should be available to everyone, but won’t because of vested interests. Just one more example.
People are coming up with new innovations every day that could potentially employ heaps of people, that never see the light of day thanks to red tape and regulation.
It’s not just a matter of changing the vision of the economic system. We need to change the bureaucracy behind it as well.

With shrinking opportunities for reward for effort, it follows that some form of socialism must be adopted. The current economic model is evidently doomed. Alreaday the wealthy have set themselves up to become the future rulers, calling the shots. But human nature, being as it is, powered by greed, there appears to be very little light at the end of the tunnel.
Without a manufacturing base providing gainful employment for the masses, national tax collection will plummet, crippling Government services.
Nation states will probably fragment into ethnic and regional groupings, each with its own militias.
Without gainful employment, we may see more population decentralisation, further propelled by a general exodus from the unruly cities filled with criminal gangs and militias.
In the cities, “Circuses and Soup Kitchens”, with an SS overseeing law and order – That’s my vision, unfortunately.
Already the US Government has purchased enormous quantities of hollow-nosed bullets and distributed them to the myriad of “Law Enforcement Agencies” across their country. These projectiles are definitely not designed for “Crowd Control”!!! They’re designed to kill quickly, in the most horribly painful way imaginable – with the projectile expanding upon entry, smashing everything to smithereens, instantly & fatally!!!
The Hague Convention outlaws their use in international disputes, but the USA is preparing to use them in situations of civil unrest. Doubtlessly, some will get into the hands of the gangs.
1984 is coming!!!
Population control, euthanasia for the sick and other drains on the economy – are these the sequels?
Hopefully, humanity will triumph over the heartless military bureaucracy.
In WW2 England, home gardens thrived. Future hardship may engender a similar trend towards self-sufficiency and a barter economy. Necessity is the mother of invention. Community gardens and other cooperative projects will doubtless invigorate local groupings.
However, highrise apartments preclude gardens, so in cities there will be an urban poor, still reliant solely upon Government handouts.
One promising factor is the improving technology for decentralisation of energy supply. When the national grids fall into disrepair, local electricity generation will be able to take over and our reliance on oil and coal will evaporate.
If you want to see what our world will be like, just take a gander at Africa. All over the continent, the colonial boundaries are giving way to tribal groupings, with ruthless militias taking control and exploiting the civilians.

hey its ron again…of course if the grecians get their way and get another reprieve..its like kicking the can down the road again…and again…and again..until it all busts anyway:-) we will see after sundays (yawn) referendum. meanwhile the gold price is being subdued again in US $..$1160 an ounce translates to AU$1550.00..so buy up big to beat the US$1300.00 ..in a few weeks..provided of course that the bankers don’t keep jumping on the lid…meanwhile the robots keep working on unknowingly, oblivious to all human activity and the zombie class is happy. see ya.

We’ve seen the industrial revolution, the green revolution, the digital revolution and now the robotic revolution. Who has benefited from all this multiplied productivity? Certainly not the average Joe and Joanne who are working longer hours than ever just to survive. Someone’s siphoning off the loot and I suspect its the banks and other big corporates. The best thing Greece (or any country) could do is kick out their (corporate) central bank and replace it with a sovereign bank that lends money to the government WITHOUT interest… Governments that borrow all their spending at interest from a central bank (like we do in Australia) is dooming their people to servitude – just do the maths! – in the meantime its a race to jack up GDP often at the expense of the environment just to pay the interest. I agree with Marty S, we are headed for corporate fuedalism… where the corporates rule (they already pull the strings). Love the idea of zeitgeist but fear the associated potential for ultimate corruption, and Jaque Fresco’s (father of Venus Project on which Z is based) opinion that we don’t deserve an opinion on anything unless we are an “expert’.

Jon
I can understand being a Greek you may have more compassion towards their cause and I appreciate that.
But the fact remains that Greeks are responsible for what is happening to them and if they want any thing different from now on they would need to change their mindset.
Always there is is a payback day sooner or later and for Greeks; it is now.

having read most of the ‘blogs’ on here i can safely say that most of us have a good understanding of whats wrong …therefore we should stand for parliament..yes first hand democracy…even if you do demean your social status. no b.s. what would any of you do if your local atm wouldn’t ‘talk’ to you…and spat out AU$60. and no more?(per day) and whats more the govt. gurus and bank ‘leaders’ had meetings behind closed doors to implement the final solution…freezing of cash deposits and definitely safe custody packets and boxes….it could happen…so it is most imprudent to lodge any valuables or gold with your ‘friendly’ bank. they will confiscate all of it for the ‘good of the country’. an american man lodged US$860m in gold bars with libor bank a few years ago, receipted and all..remember libor bank? the chief guru sent it broke in one year! after he sent the state of new jersey broke a couple of years before! he got a plum job with somebody else after that..amazing! the official receivers grabbed all of the remaining assets of the bank including the US$860m!!! they played by the old rule..he who holds the gold…owns the gold. the poor american man produced his receipt..but to no avail..he went to court ..to no avail. lose US$860m…no thanks. banks are borrowers of your money and no more..they lend it out by leveraging the ‘deposits’ held(your money)…leveraging at over 80:1..meaning for every dollar deposited they can loan out $80…like a spinning top..and if the top stops spinning..wow….what to do? is it legal? yes..apparently..you see banks have a license..to operate for the economic good of the country. therefore one cannot upset the status quo. as jon says banks are necessary when they behave themselves. all over the world there is economic trouble..hence the US$800 trillion derivitive debt. greece is only a pimple..now…but if too many pimples appear..you may need to go and see a doctor lol. and if they get bigger and bigger.? look, when the crunch comes..and it will…be prepared. your friendly bank will not help you, neither will your local politician..they will head for the hills..with a head start. the current fed. and state govt.s don’t appear to recognise the problem…gay marriages legislation is much more important. so joe hockey will continue to run amuck with the countrie’s money and rabbit abbot will continue to play around with the countries reputation. shirtfront the russian president? i’d like to see that! the most powerful man in the world by a street is putin..and we should acknowledge that. like him or hate him doesn’t alter the situation. good luck!!

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